Month: December 2016

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Discount Brokerage Weekly Roundup – December 30, 2016

Welcome to the last edition of the roundup for 2016. As the year winds down, it looks like markets and investors have finally decided to take a pause and celebrate an eventful year. This edition of the roundup will be short and sweet, featuring the final installment of the roundup of roundups from 2016 as well as the last batch of tweets and chatter from across social media and investor forums.

Roundup of Roundups: Q4 2016

The last quarter of activity in 2016 saw a big focus on feature announcements from Canadian discount brokerages, the year-end rankings and ratings as well as the release of some interesting data on deals & promotions that highlighted the gap between what DIY investors want and what brokerages have been offering. With the uncertainties now thrown into financial markets, increasing competition between brokerages as well as from robo-advisors, the moves being made in the last few months of the year have set the stage for an interesting start to 2017.

Tell You What I Want…

Online investors are, not surprisingly, turning to online channels when doing their research on which online brokerages to choose. Seeing a fair share of traffic from these folks, we at SparxTrading.com set about asking those in the market for an online brokerage whether or not the deals or promotions actually matter to a purchase decision and if they do matter, what kinds of promotions were they interested in. The results, published in October and November, pointed to an interesting set of findings. First, for those respondents in the market for a discount brokerage account, 85% said deals make a difference as to who they would choose. Secondly, there appears to be a disconnect between what DIY investors really wanted and what online brokerages typically offered as an incentive. For example, even though respondents said they overwhelmingly prefer cash back incentives, the majority of deals or incentives offered in 2016 did not fall into this category. Interestingly, and perhaps not coincidentally, later in the fall of 2016 major online brokerages started marketing commission credit deals as ‘cash back’ offers.

Two Steps Forward

The fall continued to be busy with announcements and unveilings of new features. Several Canadian discount brokerages, including TD Direct Investing, Qtrade Investor and Virtual Brokers announced significant additions to their set of services. In the case of TD Direct Investing, they were able to successfully roll out conditional order types on WebBroker. Qtrade Investor, on the other hand, released a number of feature enhancements, most notable among them being the addition of more commission-free ETFs to bring the number to 100. Finally, Virtual Brokers launched into the world of investor education in a big way with the addition of an investor education section.

Climbing the Ladder

The last big story for the final calendar quarter of 2016 was the rankings and ratings of Canadian discount brokerages. The ranking and comparison of online brokerages is something that we’ve spent a lot of time on over the years and what stood out about the 2016 rankings, especially from the Globe and Mail, is the sense that we may have reached peak DIY investor. While it doesn’t spell immediate decline for DIY investing, there are now alternatives to the DIY investor approach, notably from robo-advisors, that offer yet another choice in the landscape of financial services for investing. As for the results themselves, Qtrade Investor had a strong showing in 2016 taking top prize in both the Surviscor ratings as well as in Rob Carrick’s annual online brokerage rankings. Interestingly, when we compared the rankings from the Globe and Mail for the past several years, the rank and order of results were largely the same, suggesting that in spite of the many changes that have occurred, the changes have been more evolutionary rather than revolutionary.

Discount Brokerage Tweets of the Week

The diehard investors were still online and tweeting heading into the last week of 2016. Mentioned this week were CIBC Investor’s Edge, Questrade, Scotia iTRADE & TD Direct Investing.

From the Forums

Investors in the House

One of the great developments over the past few years is that online brokerages, or at least some online brokerages, are allowing members of the same household (or even friends) to qualify for a group discount on fees. This post from RedFlagDeals.com reveals what happened when one investor tried to set this up at Scotia iTRADE.

Double Take

Sometimes it pays to get a second, third or fourth opinion when making a financial decision. In 2016 (soon to be 2017) the power of crowd-sourced wisdom is available to tap into when it comes to making financial decisions. In this post from reddit’s Personal Finance Canada subreddit, one user was looking for some added perspective before taking the leap into DIY investing at TD Direct Investing.

Into the Close

That’s a wrap for 2016. It has been another eventful year in the Canadian discount brokerage space and 2017 is sure to be even more exciting. On behalf of everyone at the SparxTrading.com team, have a safe and happy New Year!

 

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Discount Brokerage Weekly Roundup – December 23, 2016

Well, it’s hard to believe but Christmas is literally just two sleeps away. While DIY investors are either busy looking for a deal, a present or are relaxing from the mayhem that is a shopping mall, it looks like Canadian discount brokerages are taking cues from other businesses and putting up deals for DIY investors ahead of Christmas.

In this holiday edition of the roundup, we’ll keep things short so you can get back to enjoying the festivities. We kick off with news that every investor loves to find out about – a new deal being offered by one of Canada’s bank-owned online brokerages. From there we’ll take a look at the highlights from Q3 of 2016 in the third of our 2016 roundup of roundups. As always, we’ll close out by taking a look at what DIY investors were chatting about on social media and on the investing forums.

Gift Wrapped Deal

Just in time for Christmas yet another Canadian discount brokerage is offering up a big gift to DIY investors in the form of a promotion. This past week, National Bank Direct Brokerage crossed our radar with a generous trade rebate offer with a very splashy headline: up to $1000 cash back for individuals signing up for a new account.

While the headline does grab attention, it is important to unpack the clever advertising from the real picture, so let’s drill down on some of the details of their latest offer.

Perhaps the most important component to this offer is that it is actually a commission-rebate offer, meaning that individuals who are eligible for this offer can have their trading commissions reimbursed up to the amount stated in the promotion.  Unlike other cash-back offers that provide a payment of a fixed amount up front, this ‘cash back’ occurs after individuals make eligible trades.

The dollar amount that an individual can get credited depends on the value of the account they open with NBDB. In the case of this offer, there are two deposit tiers, the first ranging between $20,000 and $99,999, for which individuals receive up to $500 in commission rebates; and the second for deposits of $100,000 or more for which individuals can receive up to $1,000 in commission-credits.

In looking at NBDB’s latest promotion, it is interesting to see who they are positioning to compete with. On the one hand, their offer is very similar in structure to the TD Direct Investing offer – commission rebates marketed as cash-back promotions. Comparing the two offers side by side, NBDB has the lower threshold to qualify versus TD Direct Investing, however for depositors with more than $50,000, TD Direct Investing is offering more in terms of commission rebates. One very important distinction, however, is that the NBDB offer is eligible for 90 days whereas there is a fixed cut-off date for TD Direct Investing’s offer, so TD’s offer becomes more challenging to fully use up the longer individuals wait to take advantage of it.

The good news for DIY investors is that it appears that online brokerages are once again starting to work harder to try and win new clients – especially heading into the busy RRSP season. Interestingly, this is now the second offer to launch in December (the other was TD Direct Investing two weeks ago) that appears to run until the end of March of next year. This is definitely a bullish signal that bank-owned brokerages are placing their bets early because it will likely motivate both larger and smaller discount brokerages to follow suit.

Discount Brokerage Roundup Recap from Q3 2016

#Hashtag You’re It

TD Direct Investing gets social by hosting their first DIY investing Twitter chat. #FunFact many years ago, SparxTrading  was tweeting live from an Investools seminar and helped get the ball rolling on the TD Direct Investing Twitter presence. Since then, TD Direct Investing, has become a very active on social media. Here is a recap of 350+ tweets we put together that covered their #DIYInvesting Twitter Chat.

Eye of the Buyer

Along with the US presidential election race, our eyes were turned stateside to see what was happening with US-based online brokerages and what, if anything, that could mean for Canadian online brokerages. One of the advantages of looking at the US market is that they provide a window into how the online brokerage business works, what challenges they’re facing as an industry and what innovation is taking place. In the case of a couple of July weekly roundups, we learned that Interactive Brokers is crushing it when it comes to profitability per account as well as steady account growth. Anyone watching the space closely can see that they are clearly going to harder to challenge as they grow in size and presence globally. We also learned about consolidation taking place in the US market, with E*trade acquiring OptionsHouse.

Going Back to School

Scotia iTRADE got a jump on the competition and back-to-school season by launching a rebranded educational offering for DIY investors. Their Scotia iTRADE U managed to predate the push later on in the year by Virtual Brokers to get into the investor education game. Interestingly, the biggest player in the space, TD Direct Investing, has seen a shift in how and where it is delivering investor education content – choosing to deliver it via webinar rather than run as many in person seminars. Later in 2016, Virtual Brokers would also roll out its new education centre

Preferred Pricing

In early September, Qtrade Investor took a big step into the commission-pricing battle by offering up a pricing break on commissions for young investors (where was this when I started investing!). The commission rates for younger investors are $7.75 per trade – down from the standard $8.75. That move by Qtrade Investor certainly helped to put them back on the radar of price sensitive DIY investors and arguably helped to maintain their presence atop the Globe and Mail Online Brokerage Rankings for 2016 which came out in December.

Discount Brokerage Tweets of the Week

From the Forums

Icy Conditions

If there’s one thing that winter driving reminds traders of, it’s to always keep an eye out for things that can go wrong. Of course, that’s not always possible for active traders who rely on technology to work the way it’s supposed to – especially with stop losses. In this post from Canadian Money Forum, one user’s experience with stop losses not working with bracket orders is definitely a good reminder or lesson to anyone using these order types.

The People’s Choice

With the latest results from online brokerage rankings now published, there’s one source that DIY investors consult that provides a very different point of view. In this post from reddit’s personal finance Canada thread, one person asking for who the ‘best online brokerage’ would be, gets a very different answer than either of the two recent rankings crowned.

Into the Close

That’s a wrap on the second last weekly roundup for 2016. On behalf of the SparxTrading.com team, happy holidays to all of our loyal readers. Next week’s edition will be the last of the current format – we’ve got some exciting news and changes coming to SparxTrading.com planned for 2017. Stay tuned, stay safe and enjoy the time off from trading to do something fun!

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Discount Brokerage Weekly Roundup – December 16, 2016

If there was any doubt that winter is coming, it’s pretty much been buried at this point underneath a pile of snow. The infamous game of thrones reference seems more appropriate than ever, not just for markets, but also for the tough times to come for Canada’s discount brokerages.

In this week’s roundup, we take a look at the most influential brokerage ranking of the year and what it signals about the Canadian discount brokerage landscape. From there, we’ll take a look at the second roundup of roundups from 2016 and then close out with some interesting tweets from the week and investor forum chatter.

Globe & Mail Online Brokerage Rankings 2016: Evolution or Revolution?

This past week, the 18th (yes that’s right) annual discount brokerage rankings were published by Rob Carrick at the Globe and Mail. It’s an amazing milestone, even more so considering how much of the online world has changed over that span of time. Ironically, change, or lack thereof, happens to be an interesting theme when looking at this year’s results and when evaluating Canadian discount brokerages.

While the results themselves tell an interesting story, perhaps the bigger and more intriguing picture is what the rankings and the accompanying commentary suggest about Canadian online brokerages. Namely, like many 18 year olds, this year’s Canadian online brokerage rankings seem like they’re ‘over it’.

Before looking at the big picture, let’s recap the results.

This year’s results saw Qtrade Investor and Virtual Brokers both achieving the highest letter grade, an A, resulting in a tie for ‘the best’ online brokerage in Canada whereas HSBC InvestDirect once again earned the dubious distinction of coming in last. Interestingly, the results from this year’s rankings are largely the same as past four rankings going back to 2013 (see table below) this despite substantial changes in pricing, features, websites, and trading platforms across the industry.

On a year-over-year basis, letter grades improved for CIBC Investor’s Edge, Desjardins Online Brokerage, Qtrade Investor and RBC Direct Investing. Dipping slightly was Questrade, who fell to a B+ from an A-. Nonetheless, Virtual Brokers and Qtrade Investor have remained the clear favourites for Rob Carrick’s rankings for four years running, owing in large part to the curb appeal for “everyday” investors.

For Qtrade Investor, this has been a big year for awards as they’ve landed top scores with MoneySense’s ranking, Surviscor’s ranking and now the Globe and Mail ranking.

In keeping with years past, there was the combination of commentary on each of the brokerages, much of it colourful and pulling no punches, as well as commentary on the industry as a whole.  In addition, there was also a table containing forty features of a “great” discount brokerage.

While we will be publishing a more detailed analysis on the Globe & Mail online brokerage rankings in the near future, here are several very interesting observations about the latest online brokerage rankings that stood out.

First, for any long-time follower of the rankings, this iteration felt leaner than years past. It’s true that the style of writing has shifted to become more concise and digestible (a deliberate appeal to millennial readers and the tl;dr generation) but there  are a number of features, such as screenshots, extra comparison tables and analysis that were not present this go around.

The second very interesting observation was the tone of this year’s rankings. While it’s generally difficult to get very excited over financial services, this year’s online brokerage rankings felt particularly grim with Carrick stating “The old binary world of full-service and do-it-yourself investing is dead.”

These are very strong words coming from one of the most influential voices in the Canadian personal finance space, and certainly should give pause to Canadian online brokerages. For 17 versions of the rankings things have seemed upbeat and exciting, but for number 18, it seems that the writing is on the wall for Canadian discount brokerages, and the message clear: innovate or become irrelevant.

Of course, as with any ranking or rating, it is important to contextualize the figures and commentary. The letter grades, while based on a system, still reflect a high degree of subjectivity and opinion of the author.

In the case of these online brokerage rankings, it is particularly interesting to note the lack of variance in the rankings over the years and also to compare the 40 attributes of a great online brokerage to the letter grades that were given.

While we will explore these in more depth in a subsequent article, it was noteworthy to observe that the more attributes of a great brokerage a provider has, it doesn’t necessarily translate into a better letter grade, and in fact, in some cases the differences between letter grade and number of features can be substantial. The following table shows, for example, that despite having more “great” features, RBC Direct Investing and Scotia iTRADE (each with 29 out of 40 attributes) received a grade of B while Questrade (with 22 out of 40) received a B+.

Change, and more importantly exciting change, as the tables above show, is hard to come by in this space. Over the past several ranking cycles, at least according to the categories measured by Rob Carrick’s analysis, most Canadian online brokerages are treading water.

With shrinking margins and increasing competition from other investment service providers, innovations in the online brokerage world seem like they’re going to be evolutionary rather than revolutionary. DIY investors, on the other hand, might need to stop asking ‘which online brokerage is best?’ and start asking ‘which online brokerage adapts the best?’

Roundup of Roundups Q2

The quarter was filled with excitement – a Canadian election, wildfires in Alberta and a Brexit all dominated the news cycle. On the discount brokerage front there were also some noteworthy developments heading out of the ‘busy season’.

The first important development noted was the pullback in deals from Questrade. As the dominant promotional offer provider, it was interesting to see them pump the brakes on offering new deals or promotions. This move would come to define the deals space for the remainder of 2016 and it opened up the field to other brokerages, such as Virtual Brokers, who were ramping up in providing incentives and promotions.

Another interesting development was the launch of the MoneySense brokerage rankings in April. These rankings, powered by Surviscor, crowned Qtrade Investor as the best Canadian discount brokerage overall, with numerous awards being the best at something being given out to many other brokerages too.  As we would come to learn later in the year, MoneySense magazine would abandon doing print versions of its magazine and instead publish exclusively online.

Social media starts to show signs of life in May with Scotia iTRADE launching another competition to drive traffic to its investor centre and National Bank Direct Brokerage making a play on LinkedIn to get a foothold there. Interestingly, late spring is when a number of issues and outages were noted with TD Direct Investing’s WebBroker – especially around the Brexit vote aftermath. These issues would continue to persist and irritate investors through the summer and fall.

Discount Brokerage Tweets of the Week

Glitches and technical hiccups were the theme of many tweets this week. Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Green and/or Green

In this post from reddit’s Personal Finance Canada section, one investor was considering the pros and cons of choosing betwen a TD e-series account or a DIY investor account at Questrade. Find out what users (and Questrade) had to say.

Into the Close

That’s a wrap on a cold and snowy week. Remember, if you can’t get out of it, you’ve got to learn to get into it. Stay safe and warm this weekend!

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Discount Brokerage Weekly Roundup – December 9, 2016

It looks like 2016 is not about to go quietly. With new all-time high for the Dow and markets generally buoyant after the US election, bulls are still driving the bus. Good thing for them they’ve got snow tires. Also not slowing down heading into the end of the year: some Canadian discount brokerages who are hoping to hit the ground running (as it were) in January.

This week’s roundup features the latest big launch from one of Canada’s non-bank-owned brokerages as they double down on investor education. Next, we look back at Q1 of 2016 for the first in the series of reviews on 2016. As usual, we also have the latest investor chatter from Twitter and close out with conversations on investing forums to bring a little more colour into the mix.

Virtual Brokers Bets on Learning

Despite the finish line to 2016 being only a few weeks away, at least one Canadian online brokerage wanted to end the year on a high note with the launch of a new investor education section. Virtual Brokers, a non-bank owned online broker, launched a new investor education section on their website earlier this week.

The new investor education section contains a selection of videos and articles on a variety of topics relevant to DIY investors, such as options trading, registered accounts, different types of investing products and more.

One of the first things that stands out about the investor section is that it has a very different layout and experience than the rest of the Virtual Brokers website. The navigation of the education section is definitely built around being in the education section, something that Virtual Brokers believed to be important to creating a more content-focused experience for visitors to this section of the website.

As the investor education section has just launched, the content that is currently there will grow and it will likely evolve over time, according to Dennis Kim, a marketing specialist at Virtual Brokers who was directly involved in the development of this section. For the moment, however, the categories focus on a mixture of specific topics, such as account types, or life stages/personas, such as students, families or those who are working or retired.

The content itself is a mixture of internally produced and authored material, as well as content authored by investment firm AGF, which was republished by Virtual Brokers.

One of the key themes of the investor education section, according to Virtual Brokers, was to make information entertaining and ‘fun’.  Admittedly, finding information is a bit of an adventure as the layout may be challenging to navigate for specific information. Nonetheless, the content is freely available to website visitors without having to register or provide personal information – which is a big plus to those who would like to get information without having to provide their own contact details to access it.

Investor education provided by online brokerages has traditionally been something that DIY investors have met with some trepidation. On the one hand, there is clearly a benefit on the part of online brokerages to promote trading and investing, as that directly leads to more commissions being generated. Conversely, investors, especially those seeking to enter the markets for the first time or who are investing on their own, benefit from having tools, knowledge and confidence to navigate the markets.

So, while it seems like the ultimate win-win, investor education from most Canadian discount brokerages has historically fallen short of providing well structured, comprehensive investor education.  The reason is probably simple: discount brokerages are not in the primary business of education. To be fair, however, most brokerages have gotten around this by offering investor education via partners who are professionals.

From a strategic point of view, the latest move by Virtual Brokers to build out their educational offering is an interesting one.

At a time when the industry as a whole is facing challenges to contain costs, doing investor education well and in a timely manner means that it won’t be cheap. And, with pressures on margins, adding a line item like content creation means there is going to have to be an associated return (i.e. more clients or clients trading more) that can justify the spend.  Further, with other sites such as GetSmarterAboutMoney.ca from the OSC and InvestRight from the BCSC also actively marketing themselves as sources for trustworthy information on ‘the basics’ of investing/trading, attracting an audience and differentiating the product to the DIY investor will also take time, effort and ultimately resources.

For DIY investors, the upshot is that in order to effectively compete against one another, Canadian discount brokerages will have to adding features and services that are relevant and useful in order to stand apart from one another. Virtual Brokers’ latest move into investor education signals that they are not standing still in a landscape that is becoming increasingly competitive. With robo-advisors now nipping at their heels and other online brokerages doubling down on technology, now more than ever, the brokerages who aren’t moving, aren’t improving – and that will be a tough lesson for any brokerage to learn the hard way.

TD Direct Investing Launches a Big Deal

Is it a coincidence that TD Direct Investing launches a major commission-free trading deal just before the official colour 2017 was announced to be a shade of green? We think not.

For DIY investors heading into the Christmas break (and who are surfing around for an online brokerage to choose), TD Direct Investing seems to have a knack for timing by launching a new offer that provides up to 200 trades commission free. Of course, being the ever savvy marketers, the ‘pitch’ to investors is that of getting up to $2,000 cash back, something that investors would definitely tune in to. But, all is fair in love and advertising.

This offer looks to take aim at clients that most bank-owned brokerages would be interested in, namely individuals with at least $25,000 in assets. TD Direct Investing’s latest promotion is tiered meaning the more an individual deposits the higher the number of trades they can get commission-free. The minimum deposit is $25,000 which nets 50 commission-free trades; the next tier starts at $50,000 which can get DIY investors up to 100 commission-free trades and finally those depositing at least $100,000 are in line to receive up to 200 trades.

Of course, now that TD Direct Investing has stepped into the deals pool, it will force a pre-Christmas scramble across the board for other brokerages to step in or risk being eclipsed by one of Canada’s most popular online brokerages heading into 2017.

Roundup of Roundups Q1

Now that 2016 is almost over, it’s a great moment to look back on the year that was and reflect on what some of the biggest stories were over the year. With so many great stories to consider, we’ve decided to break down the biggest stories by quarter, starting first with Q1 of 2016.

The year kicked off on a somewhat panicked note for many investors. With the price of oil in a tailspin and investors worried, the savvy investors that braved the bad news were handsomely rewarded. On the discount brokerage front, one of the biggest stories from Q1 came from Virtual Brokers, when they announced their new commission-free trading offer and also reconfigured their commission pricing structure. And that was just January.

Not to be outdone by fee changes, National Bank Direct Brokerage pulled the trigger on removing commission fees altogether on Canadian ETFs. After a couple of promotions in which this same offer was made, the official shift to commission-free ETFs, at least for Canadian ETFs, meant that their bank-owned brokerage peers now had to pony up some serious counter offers to compete. While Scotia iTRADE, the only other Canadian bank-owned brokerage to offer a selection of 50 commission-free ETFs, National Bank Direct Brokerage’s offer made over 500 ETFs available. With the shift in the Canadian dollar, this made the offer all the more attractive for NBDB. As the year went on, however, there wasn’t as much hype or advertising around this feature, nor from NBDB in general – a surprise given the contest to gain ground against more visible and established online brokerages can really only be won at this point by a boost in awareness (i.e. marketing).

Lastly, the trend towards improving user experience via website improvements saw RBC Direct Investing announce a major upgrade to their previous website. As a very recognizable brand, RBC Direct Investing later found out very quickly that newer doesn’t necessarily mean better – something that should ring true while technology budgets are increasing across the board in financial services. While generally receiving positive feedback, there were still many users who had grown accustomed to the previous layouts and where to find things that mattered to them.  Nonetheless, the shift in digital direction spoke to a larger trend across the online brokerage space where technology and digital strategy became a huge talking point for 2016.

Discount Brokerage Tweets of the Week

This past week there was lots of green and red on users screens, not just from upticks and downticks. Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Qtrade Investor, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Easy Come

In this post from the reddit Personal Finance Canada thread, one user recounts the process involved in opening an online brokerage account with TD Direct Investing along with questions on some of the thornier parts of getting started.

Easy Go

In contrast to the post above, this post, also from the reddit Personal Finance Canada thread, was about the experience of switching out of TD to Questrade.

Into the Close

That does it for this week’s roundup. For those of you who managed to conquer the snowpocaplypse in Vancouver, congratulations! Of course just know that the rest of Canada is looking westward and thinking it still seems like a dusting. Whether you’re digging out from under a pile of snow or digging around in a mall for a last minute Christmas gift, have a great weekend!

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Discount Brokerage Weekly Roundup – December 2, 2016

Every now and then, the real world throws an interesting case study in the uncertainty factor of markets. The air miles reversal on letting their points expire is a great example of why in markets, just as in life, the scenario of the ‘unknown’ needs to be priced into assumptions. Perhaps the best way to sum it up is that the future always has some degree of uncertainty to it. For DIY investors, this is now the territory they find themselves in with regards to the Canadian online brokerage space heading into 2017.

In this week’s roundup, we take a look at the latest deals & promotions activity at Canadian discount brokerages to give our view on what the market is saying and what may be coming around the corner heading into 2017. Next we take a look at the latest online brokerage rankings to see what they can tell us about the landscape of Canadian discount brokerages and online investing in general. From there we’ll take a look at the latest tweets and close out with chatter from investor forums.

 ‘Tis the Season

Deals have been a hot topic for the past few weeks. With Black Friday and Cyber Monday now behind us, the start of a new month provides the chance to take the pulse of the latest promotional offers from Canadian discount brokerages.

In a market, ebbs and flows are natural. For the Canadian discount brokerage marketplace, deals and promotions fluctuate across the year but heading into the last month of 2016, there’s a noticeable pullback. The biggest contributor to the month over month decline in offers was from Scotia iTRADE, whose three promotional offers expired at the end of November and were not renewed.

Of course, to make things more interesting, December also has three offers set to expire from three different brokerages. Should these offers not be renewed or replaced with other offers, this would reduce the number of cash back/commission-free trades from six down to four. Interestingly, BMO InvestorLine’s cash back offer is set to expire in early January 2017 meaning that it is possible that cash-back and free-trade promotions could make up the smallest segment of offer types at the outset of the new year. This would be a very different scenario than has been the case over the past three years in which cash-back or commission-free trades, in particular, have been a mainstay of the deals section.

With RRSP season not that far away, however, odds favour a surge in the marketing efforts by Canadian online brokerages in the new year. Some interesting hiring patterns at several brokerages combined with an increase in advertising on social media sites, such as Twitter and Facebook mean that DIY investors can look forward to getting the message online when or if brokerages decide to push go.

The bigger picture, however, seems to suggest that the industry as a whole is in a bit of a transition period. When it comes to incentives specifically, however, the online brokerage industry is no longer aggressively innovating or competing.

Incentive offers are, arguably, a signal of market sentiment and confidence. The absence of new offers or the relatively slow velocity of offers getting to market suggests that while competition is present, many brokerages seem uncertain about their own direction at the moment. Ironically, for those Canadian online brokerages that do not appear excited about online investing, it will be hard to convince DIY investors to be excited too.

Season’s Ratings

Aside from Christmas displays and holiday cheer, the final few weeks of the year are when Canadian discount brokerage rankings get published. Earlier today, brokerage rankings from financial services research firm Surviscor were published online and broadcast on BNN.

This year’s top rated Canadian online brokerage was Qtrade Investor, who scored 87% on the scorCard ratings which take into account nine different categories of a firm’s performance. While Qtrade Investor’s rating was significantly higher than its competitors, the second place through fifth place ratings were separated by only 2 percentage points signaling that in many ways, the majority of Canadian discount brokerages are neck in neck when it comes to features, pricing and accessibility.  In other words, nobody really stands out.

Source: BNN Screenshot

From the BNN broadcasts, however, it also seems like the online brokerage industry, at least in 2016, has been trying to figure out how or if robo-advisors will make a difference. In an in-depth study on robo-advisors by DALBAR Canada (full disclosure, we assisted with analysis in this study), there are very clear differences in the way Canadian robo-advisors attract and work with new clients.

When compared side-by-side with Canadian discount brokerages, however, there are even more apparent differences that emerge about the way in which robo-advisors are handling bringing new clients aboard and about the sign up process in general.

Like all discount brokerage rankings, we always suggest a measure of caution when looking at the results.

Over the course of 2016, we have chronicled the changes taking place at Canadian brokerages and can certainly validate the claims that Qtrade Investor has gone to great lengths to improve many areas of their offering, from pricing and features to overall user experience.

As for the rest of the field, however, the Surviscor ratings reflect the challenge in objectively assessing the changes that have been made. For example, when changes are made to a website or to a trading platform, the improvement in “user experience” is difficult to quantify. Canadian discount brokerages may have made improvements, however, the extent to which they are noticeable and quantifiable (such as changing pricing) impacts how drastically they can be distinguished from competitor firms.

On an interesting to note, three of the top five Canadian online brokerages in the latest ratings were not bank-owned brokerages.

One place in particular that the Surviscor ratings are able to shine is in the tracking and measurement of response times across channels, such as emails. The key takeaway from Glenn Lacoste, president of Surviscor, as well as from Dale Jackson in a segment broadcast earlier on BNN is that service response times have degraded at Canadian online brokerages.

For Qtrade Investor, however, there are clearly a number of areas in which they’ve managed to make meaningful strides in 2016.  According to a comment in today’s press release, Catherine Wood, Senior VP and Head of Online Brokerage at Qtrade Financial Group stated:

“The results of this assessment validate our commitment to improving and streamlining the client experience and to offering competitive pricing in order to provide the absolute best value among Canada’s online brokerages. The enhancements we made this year were inspired by client feedback and supported by client usage analytics, and thus far we’ve been very pleased by the positive reaction from our clients.”

Encouragingly, there appears to be an increased reliance on client usage data in the decisions driving changes to features and user experience.

Looking forward into 2017, many online brokerages will need to finally decide if and how they are going to be deploying a digital advice product and whichever direction they go in, start to work to innovate the online brokerage experience for DIY investors. If there’s one thing that these latest rankings have made clear, is that innovation and improvements need to happen often and visibly throughout the year. Standing still only lets other firms who are hungrier to win get ahead.

Discount Brokerage Tweets of the Week

This week marketing was pushing the envelope and getting people talking. But isn’t that the point? Mentioned this week, was BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

‘Mo Money, ‘Mo Problems

It’s definitely a nice problem to have but if your portfolio grows beyond the CIPF coverage, what then? In this post from Redflagdeals.com’s investing section, one user tries to find out what their options are when it comes to getting more coverage for a bigger portfolio, especially in the event that a brokerage goes bankrupt.

DIY another day

Have we reached peak DIY investing? The growth in popularity of passive investing strategies coupled with the rise of robo-advisors means that those on the fence about DIY investing are getting mixed messages when it comes to the merits of stock picking versus having someone or something else do it. In this post from reddit’s personal finance Canada section, it was interesting to gauge the sentiment of would-be DIY investors stepping into the markets for the first time.

Into the Close

Another week in the books. With only a few weeks (or days) left until Christmas, good luck to the shoppers looking to make it through their shopping list. For those savvy investors who’ve gone long on online retailers, this is hopefully a great weekend to watch the transaction traffic pay off. Either way, have a great weekend!

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Discount Brokerage Deals & Promotions – December 1, 2016

*Update: Dec. 23* December is here and the end of 2016 is just a few short weeks away. What a year it has been. As we head into the final month of the year, we expect there to be a gradual decrease in deals & promotion activity at Canadian discount brokerages leading up to Christmas. Nevertheless, we don’t rule out a potential surprise or two before the holidays officially kick in.

There weren’t any new deals that crossed our radar into the turn of the new month. In fact, there was a slight pull back in the number of offers (there are currently 23 at the time of publication) as the promotions scheduled to expire at the end of November by Scotia iTRADE were not renewed – or at least not yet.

December will be another interesting month across the deals & promotions landscape for two reasons. First, there are a number of deals set to expire, notably from HSBC InvestDirect, Disnat and Qtrade Investor. BMO InvestorLine’s deal, while still technically live through December is set to expire at the beginning (January 3rd) of 2017. The second reason that this will be an interesting month to watch for deals & promotions is that once this month is over, there will be a massive push to attract new clients and assets for RRSP season. As such, it might not be surprising to see a couple of savvy brokerages launch through December to get a jump on January. We’ll keep monitoring to see where things go from here.

Expired Deals

The three deals that were scheduled to expire at the end of November were all from Scotia iTRADE. Now retired are the commission-free trades (up to 250 commission free trades) and trades + SCENE points promotional offer (as well as the accompanying transfer fee deal).

Extended

Questrade has extended the deadline to their 5 commission-free trades offer from the end of December 2016 through to the end of December 2017. That’s great news for individual investors just starting out and who need a referral to qualify for a promotional offer with Questrade.

New Offers

*Update: Dec. 23 – National Bank Direct Brokerage has also jumped into the deals & promotions race ahead of the Christmas break with a headline grabbing promotion of their own. They’re offering up to $1000 in commission reimbursements for individuals who either open up a new account or for existing clients who open a new account type. See table below for more information.*

*Update: Dec. 9 – It took some time to get here, but at last there’s a deal from TD Direct Investing. The big green is offering up a tiered commission-free trading offer that is likely to get the attention of DIY investors and, of course, TD Direct Investing’s competition. While this latest deal does help TD Direct Investing get an edge on its bank-owned brokerage peers, what is even more interesting is the timing of the offer. With only a few weeks to go, not only will other bank-owned brokerages have to scramble to respond (if they choose to do so) but they’ll be doing it heading into the holidays. For DIY investors, this a great little gift ahead of the holiday season and the year end. See the table below for more details.*

No new offers to report at this time.

Discount Brokerage Deals

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive 3 months of commission-free equity trading and a $150 USD/mo credit towards Edge Trader Pro for 3 months. Use promo code sent at sign up to qualify. Be sure to read full terms and conditions for details. $5,000 3 months commission-free equity trading + $150 USD/mo platform fee rebate. 3 months 3 months free trading / Sign up form for promo code available here none
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo December 31, 2016
Open and fund a new account by March 31st with at least A) $20,000 or B) $100,00+ and you may qualify to receive up to either A) $500 or B) $1000 in commission reimbursements. Be sure to read terms and conditions for full offer details. A) $20,000 – $99,999 B) $100,000+ A) up to $500 commission reimbursements B) up to $1000 commission reimbursements 90 days National Bank Direct Brokerage Cash Back Promotion March 31, 2017
Open and fund a new account with HSBC InvestDirect with at least A) $25,000; B) $50,000; C) $100,000; D) $250,000; E) $500,000 or F) $1,000,000+ and you may be eligible to receive a cash bonus offer of A) $88; B) $188; C) $288; D) $388; E) $688 or F) $988. Be sure to read terms and conditions for full offer details. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,000 – $249,999 D) $250,000- $499,999 E) $500,000 – $999,999 F) 1,000,000+ Cash back bonus A) $88 B) $188 C) $288 D) $388 E) $688 F) $988 Bonus will be credited to the qualified accounts by July 31, 2017 HSBC InvestDirect Cash Bonus Promo December 30, 2016
Open and fund a new account at TD Direct Investing with at least A) $25,000; B) $50,000 or C) $100,000+ and you may be eligible to receive A) 50; B) 100 or C) 200 commission-free trades. Be sure to read terms and conditions for full offer details A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,000+ A) 50 commission-free trades (max value: $500) B) 100 commission-free trades (max value: $1000) C) 200 commission-free trades (max value: $2000) April 28th, 2017 Commission charges will be credited the month following when the charge was incurred. TD Direct Investing 200 Commission-free Trade Offer March 31, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least $100,000 and you may be eligible to receive $200 cash back as well as 20 commission-free equity trades. Use promo code PROMO200 when signing up to be eligible. Be sure to read the terms and conditions for more details on the offer. $100,000 $200 cash back + 20 commission-free equity trades Cash back will be deposited the week of August 7, 2017. Fall 2016 Promotion Phase 2 January 3, 2017

Expired Offers
Last Updated: Dec. 23, 2016 22:30 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
If you (an existing Virtual Brokers client) refer a friend or family member to open a new account with at least $1,000 you may be eligible to receive $25 cash per referral. For 3 or more referrals Virtual Brokers will add a $50 bonus. Referred individuals depositing either A) $1,000 – $24,999; B) $25,000 – $49,999 or C) $50,000+ may be eligible to receive A) $25; B) $50 or C) $75 cash back. Be sure to read the full terms and conditions carefully for full details. A) $1,000 – $24,999 B) $25,000 – $49,999 C) $50,000+ Referrer: $25 per referral; $50 bonus for each 3 or more referrals. Referee: A) $25 B) $50 C) $75 Cash to be deposited to VB account by March 31, 2017. Cash Referral Program January 31, 2017
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2017

Expired Offers
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit 30 days none none
Last Updated: Dec. 1, 2016 22:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $10,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $10,000 Transfer Fee Rebate December 31, 2016
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo September 30, 2016
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code Disnat500. See details link for more info. $150 $50,000 Disnat $500 Commission Credit Promo September 30, 2016

Expired Offers
Last Updated: Dec. 1, 2016 22:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) or $5,000 (for the Commission Free Trading Account) and you may be eligible to receive a one-year subscription to access 5i Research. Use promo code 5iVB2016 when signing up. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account); $5,000 (Commission Free Trading Account) 5i Research Offer March 31, 2017

Expired Offers
Last Updated: Dec. 1, 22:30 PT